The Nagpur Chamber of Commerce Limited (NCCL) urged the Union Finance Minister to bring down the tax rate of direct taxes for all corporate and non-corporate entities (including LLPs & firms) to 25 per cent. The chamber also felt that the maximum marginal rate for individuals should also be brought down to 25 per cent and the basic exemption limit be increased to Rs 5 lakh. For tax audit in case of partners of firms, the Chamber sought an amendment in section 44AB of the Income Tax Act, 1961 for the purpose of applying section 44AB in the hands of partners, the remuneration, interest and share of profit received from the firm shall not be taken into account while determining the amount of threshold limit.

 

Former President of the chamber Kailash Jogani said that a scheme similar to personal ledger account (PLA) in erstwhile Excise or as per current system i.e. Cash ledger system in GST should be inserted in the direct taxes, wherein the tax payer can adjust the same with Advance Tax, Self assessment tax or TDS. “The taxpayer should be allowed to pay lump sum amount as per his convenience and later on due dates he must be allowed to set off the exact amount he needs to tender vide challan,” he felt. As of now under Section 40A(3) the expenditure made in cash for amount exceeding Rs 10,000 is disallowed completely. But Jogani said that the excess of Rs 10,000 should only be disallowed. Section 71 of the Act provides with set off of loss arising under the head “Income from House Property” against any other head of income.

 

As per section 71 it is restricted to setoff the losses to the extent of Rs 2,00,000 against another head of income. “It is completely irrational move by the earlier Finance Minister and therefore it should be withdrawn,” NCCL said. The Nagpur Chamber of Commerce Limited further highlighted the need to reconsider high rate of tax U/s 115BBE; simplification and reduction in compliances for TDS and TCS; adjustment of undisputed refunds against TDS and tax liabilities; and gave suggestions with respect to compulsory filing of balance sheet / assets and liabilities. The chamber also demanded revision of limit of advance tax u/s. 208 and want simplification of penal provisions among other changes.